Data Centers "Primary Reason" For High PJM Capacity Prices: Market Monitor

Samantha Luan

Economic

Forex

Political

Summary:

Capacity prices — a cost that is ultimately paid for by electricity consumers — surged in PJM’s last two July capacity auctions.

An Amazon Web Services data center near single-family homes on July 17, 2024, in Stone Ridge, Virginia. Data center load resulted in $16.6 billion in capacity auction revenue in the PJM Interconnection’s last two capacity auctions, according to a report released on Oct. 1, 2025, by the grid operator’s market monitor

The 2024 auction results led to double-digit electric bill increases for some utility customers in PJM’s footprint, which covers parts of 13 Mid-Atlantic and Midwest states and the District of Columbia.

PJM holds capacity auctions to help ensure that it has adequate power supplies to meet future needs. In the last auction, PJM bought capacity for a one-year period that starts on June 1. The grid operator is preparing to hold its next auction in early December to buy capacity for a year beginning on June 1, 2027.

Monitoring Analytics contends it is “misleading” to say that PJM’s recent capacity market results simply reflect tightening supply and demand.“The current conditions are not the result of organic load growth,” it stated. “The current conditions in the capacity market are almost entirely the result of large load additions from data centers, both actual historical and forecast.”Also, the “extreme uncertainty” in data center load forecasts is unprecedented and “raises questions about the meaning of clearing a capacity auction based on those forecasts,” Monitoring Analytics said.

In June, the market monitor recommended requiring new data centers to supply their own generation instead of tapping into existing power supplies in PJM.“The impact of the uncertain forecast of data center load on other customers would be limited or eliminated” by the requirement, Monitoring Analytics said in the report.PJM is in the middle of a fast-track stakeholder process to develop new rules for adding large data centers to its system with a goal of filing a proposal before the end of the year at the Federal Energy Regulatory Commission.

As part of the process, PJM is proposing to bolster its load forecasting for data centers and other large loads, according to an Oct. 1 presentation from PJM staff. Under the proposal, state utility commissions could review and provide feedback on large load adjustments before they are included in PJM’s load forecast.Utilities would also have to ask if any data center proposals in their service territory are duplicative proposals. Staff suggested requiring large load customers to post financial security for the capacity they plan to buy in an auction.

PJM has dropped a proposal for “non-capacity-backed load” that was widely opposed by its stakeholders, according to the presentation.On the issue of a price cap and floor for PJM’s capacity auctions, the last auction would have been $3.2 billion, or 20%, higher except for a cost cap that grew out of an agreement between the grid operator and Pennsylvania Gov. Josh Shapiro, a Democrat, according to the market monitor’s report.

The impact of data center development on PJM’s auction results will increase sharply in the 2028/2029 base capacity auction scheduled for June, when the maximum and minimum price caps in the agreement expire, Monitoring Analytics said.Separately, the Union of Concerned Scientists this week found that utility ratepayers in PJM will pay about $4.4 billion for data center-related transmission projects that were approved in 2024 with similar results expected this year.

Source: Zero Hedge

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Samantha Luan

Economic

Forex

Japan’s jobless rate rose to its highest in over a year, signaling a slight loosening of the labor market as speculation swirls over a Bank of Japan rate hike in the near term.The unemployment rate rose to 2.6% from 2.3% in July, the Ministry of International Affairs reported Friday, against a median economist expectation of 2.4%. Separate data from the labor ministry showed that the job-to-applicant ratio ticked down to 1.20 from 1.22, meaning that there were 120 job openings for every 100 job seekers. That was the lowest number of job openings since 2022.

While August’s figures showed a slight tempering of the job market, the data still point to overall firmness amid an ongoing labor shortage. That longer term trend has pressured companies to raise wages to attract and retain workers, helping to extend wage growth. Stable wage gains along with steady inflation remain a key condition for the BOJ to stay on its gradual tightening path.The BOJ board is scheduled to give its next policy decision on Oct. 30, with market expectations for a rate hike growing. After two board members dissented against last month’s rate hold and even a dovish member communicating a hawkish stance, more traders are betting on a hike at the end of the month.

Earlier this year Japan’s largest firms pledged wage increases exceeding 5% during annual labor negotiations, marking the steepest gains in over three decades. The next round of wage talks is expected to begin later this month, with attention focused on whether businesses can maintain momentum despite concerns over a US-led tariff war weighing on corporate performance.Chronic labor shortages are becoming a serious threat to business operations. From January to August this year, 237 companies filed for bankruptcy as a result of lack of labor, up about 22% from the same period last year, according to Tokyo Shoko Research. Many of them cited the inability to meet rising wage demands, the report said.

In response, many firms are turning to foreign workers. A record 2.3 million foreign workers were in Japan’s job market as of October last year, filling gaps left by the domestic workforce.

Source: Bloomberg Europe

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James Whitman

Political

Palestinian-Israeli conflict

● Intercepts spark international protests, diplomatic tensions

● Israel says to deport those on board ships

● Thunberg claims abduction by Israeli forces in pre-recorded video

● Flotilla says one boat 'still sailing strong'

Israel faced international condemnation and protests on Thursday after its military intercepted almost all of about 40 boats in a flotilla carrying aid to Gaza and took captive more than 450 foreign activists, including Swedish campaigner Greta Thunberg.

Cameras broadcasting live feeds from the boats showed armed Israeli soldiers in helmets and night vision goggles boarding the ships, while passengers huddled in life vests with their hands up.

A video from the Israeli foreign ministry showed Thunberg, the most prominent of the passengers, sitting on a deck surrounded by soldiers.

Pro-Palestinian demonstrators took to the streets in cities across Europe as well as in Karachi, Buenos Aires and Mexico City to protest Israel's capturing of the activists two years into its assault on Gaza. Italian unions called a general strike for Friday.

The Global Sumud Flotilla, the organiser of the voyage, said on X that more than 450 volunteers had been detained. Earlier it said some of them were transferred to one large cargo vessel before being taken ashore.

One boat, the Marinette, was "still sailing strong," flotilla organizers said on a live video stream that showed the crew piloting the boat. Organizers said the Marinette was about 80 nautical miles from Gaza on Thursday night, and about 10 nautical miles from where Israel began intercepting other boats in the flotilla.

FLOTILLA MEMBERS COULD BE EXPELLED NEXT WEEK

Thunberg, 22, best known for her environmental protests, had pre-recorded a video that was released on her behalf after her ship was boarded.

"If you are watching this video, I have been abducted and taken against my will by Israeli forces," she said. "Our humanitarian mission was non-violent and abiding by international law."

Italian Foreign Minister Antonio Tajani said he expected the members of the flotilla to be expelled from Israel on Monday and Tuesday and sent to European capitals on charter flights.

The Israeli foreign ministry said in a statement it was taking all the people it had captured from the flotilla ashore at Ashdod, and that all were "safe and in good health."

"One last vessel of this provocation remains at a distance," the ministry said. "If it approaches, its attempt to enter an active combat zone and breach the blockade will also be prevented."

Map shows the location and status of boats comprising the Global Sumud Flotilla on way to Gaza.

TURKEY CONDEMNS 'THUGGERY' DIRECTED AT FLOTILLA

Turkish President Tayyip Erdogan criticised Israeli aggression, saying it showed Israel's government has no intention of letting hopes for peace grow.

"I condemn the thuggery directed at the Global Sumud Flotilla, which set out to draw attention to the barbarity of children dying of hunger in Gaza and to deliver humanitarian aid to the oppressed Palestinians,” he said in a speech to officials from his AK Party in the capital Ankara.

The Istanbul chief prosecutor's office said it had launched an investigation into the detention of 24 Turkish citizens on the vessels, Turkey’s state-owned Anadolu news agency reported.

South African President Cyril Ramaphosa urged Israel to immediately release South Africans who were on the flotilla, including former President Nelson Mandela's grandson, Nkosi Zwelivelile Mandela.

The activists were expected to be transferred to the immigration authority upon arrival in Ashdod, from where they will be moved to Ketziot Prison in southern Israel before they are deported, said Suhad Bishara, the director at Adalah, a human rights organisation and legal centre in Israel.

HIGH PROFILE OPPOSITION TO GAZA BLOCKADE

The flotilla, which set sail in late August, was transporting medicine and food to Gaza and consisted of more than 40 civilian vessels with parliamentarians, lawyers and activists in a high-profile display of opposition to Israel's blockade of Gaza, which many have said amounts to violations of the Genocide Convention.

Israeli officials have repeatedly denounced the mission as a stunt. Israel is defending itself against charges of genocide in the International Court of Justice and broader global opprobrium, arguing its actions have been in self-defense.

As the flotilla sailed across the Mediterranean Sea, Turkey, Spain and Italy sent boats or drones in case their nationals required assistance, even as it triggered repeated warnings from Israel to turn back.

HAMAS EXPRESSES SUPPORT FOR ACTIVISTS

Israel's navy had previously warned the flotilla it was approaching an active combat zone and violating a lawful blockade, and asked organisers to change course. It had offered to transfer any aid peacefully through safe channels to Gaza.

The flotilla is the latest seaborne attempt to break Israel's blockade of Gaza, much of which has been turned into a wasteland by almost two years of war.

In a statement, Hamas, which governs Gaza, expressed support for the activists and called Israel's interception of the flotilla a "criminal act", calling for public protests to condemn Israel.

The U.S. and Israel announced a new proposal to end the conflict this week that includes Hamas surrendering. U.S. President Donald Trump, who said he would temporarily oversee governance of Gaza under his plan, gave Hamas a few days to respond, and warned of continued escalation if Hamas refused.

The boats were about 70 nautical miles off Gaza when they were intercepted, inside a zone that Israel is policing to stop any boats approaching. The organisers said their communications, including the use of a live camera feed from some of the boats, had been scrambled.

Israel began its Gaza offensive after the October 7, 2023, Hamas-led attack on Israel in which some 1,200 people were killed and 251 taken as hostages back to Gaza, according to Israeli tallies. The offensive has killed over 66,000 people in Gaza, Palestinian health authorities say.

Source: Reuters

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James Whitman

Political

● Takaichi would be first female PM, leads among grassroots LDP members

● Political scion Koizumi strong among LDP lawmakers

● Hayashi, also a contender, seen as continuation candidate

● LDP candidates face run-off Saturday if no first-round winner

Japan stands a good chance of having its first woman prime minister or its youngest leader in the modern era after a vote on Saturday to pick the head of the nation’s ruling party.

The front-runners in the potentially historic Liberal Democratic Party election are conservative nationalist Sanae Takaichi, 64, and her more moderate rival Shinjiro Koizumi, 44. Opinion polls suggest Cabinet Secretary Yoshimasa Hayashi, 64, may also be a contender.

They are among five candidates vying to replace Prime Minister Shigeru Ishiba, who is stepping down after a series of electoral defeats.

The next leader is likely to become premier as the LDP is the biggest group in parliament, but that is not assured as the party – which has run Japan for almost all the postwar period - lost its majorities in both houses under Ishiba.

RULING PARTY IN CRISIS

Takaichi pledges to jolt the economy with aggressive government spending that could spook investors in an economy with one of the world's biggest debt loads. She has raised the possibility of redoing an investment deal with U.S. President Donald Trump that lowered his punishing tariffs.

Farm minister Koizumi, son of former premier Junichiro Koizumi, as well as the other candidates, say they would trim taxes to help households cope with rising living costs but otherwise hew more closely to Ishiba's economic restraint.

Whoever wins Saturday's vote will inherit a party in crisis and a sluggish economy.

Dissatisfaction with the LDP is pushing many voters, especially disillusioned younger people, to opposition parties such as an upstart anti-immigrant far-right party.

"Koizumi and Takaichi offer two quite different approaches to that renewal," said Tina Burrett, a political science professor at Tokyo's Sophia University. Koizumi is seen as someone who could forge consensus with other parties while Takaichi would shake up "a world of rather grey politicians", she said.

If chosen, Koizumi would be a few months older than Hirobumi Ito when he became Japan's first prime minister in 1885, under the nation's prewar constitution.

LAWMAKERS VS RANK AND FILE

Koizumi leads among the 295 LDP lawmakers who will vote for party leader, followed by Hayashi and Takaichi, according to an Asahi newspaper report on Wednesday. But Takaichi is ahead of both of them among rank-and-file party members who will get an equal number of votes in the first round on Saturday, a Nippon Television survey found.

If, as seems likely, the election goes to a second round, the advantage could shift as the vote of grassroots LDP members would fall to 47.

Takaichi, an ally of assassinated former Prime Minister Shinzo Abe, has the most expansionist economic platform of the LDP candidates. She has promised to double the size of the economy in a decade with heavy state investment in new technologies, infrastructure, food production and other areas of economic security.

She has said she would carry over Ishiba's trade agreement with Trump, in which Japan agreed to invest $550 billion in the U.S. in return for lower tariffs on automobiles and other Japanese products, but mentioned the possibility of renegotiation if the deal proves to be unfair.

Cabinet ministers Hayashi and Koizumi have defended the deal.

For whoever wins, one of their first acts as premier is expected to be hosting Trump in Tokyo at the end of October, Reuters has reported.

Domestically they face the tall task of rejuvenating a party increasingly seen as out of touch with voters, said James Brown, a politics professor at Temple University in Tokyo.

"There's every possibility that we'll be returning to this issue of yet another election for the leadership of the country before too long," Brown said.

Source: Reuters

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Manuel

Cryptocurrency

Bitcoin (BTC) traded at $120,367.71 as of press time, near its all-time high of $124,000, driven by expectations of a rate cut and a market structure reset.

Softer US labor signals and a live government shutdown have traders leaning heavily toward another Fed cut this month, lifting risk assets across the board.

At the same time, positioning in crypto has been “cleaned up” after the quarter-end options expiry, with flows and on-chain metrics shifting from defensive to neutral-constructive.

Bitcoin is up approximately 1.5% in the past 24 hours, after briefly reaching $121,000 on futures before slipping back.

Ethereum climbed to $4,477.52, a 3% increase on the daily timeframe, followed by BNB, which surged to $1,084.87 after a 5.7% rise.

Solana advanced to $231.93 after a 4.4% tailwind, and XRP climbed to $3.0674, up by 4% in the past 24 hours. Cardano’s 2.2% daily increase resulted in a $0.8698 price, and Dogecoin secured a 4.2% growth to $0.2596.

Growth catalysts

The macro impulse is straightforward. Private payrolls data showed an unusual decline, pushing Treasury yields lower and increasing the odds of a rate cut.

Glassnode’s Oct. 2 report helps explain why the rally looks steadier than earlier squeezes. They noted that Bitcoin continues to respect the short-term holder cost basis, a line that has acted as support since May.

Meanwhile, the price competes with a dense supply band ranging from $114,000 to $118,000. Crucially, long-term holder distribution is easing and ETF inflows have resumed, which together imply stabilizing demand rather than a one-off spike.

Sentiment gauges like the Short-Term Holder Realized Value (RVT) and the Fear & Greed Index have cooled, consistent with a period of consolidation rather than capitulation.

In derivatives, the record expiry last week reset positioning. As open interest rebuilds in the fourth quarter, implied volatility has softened, skew is drifting toward neutral, and the term structure remains in contango with a firmer back end.

Overall, the report characterized the backdrop as neutral but constructive, waiting on a catalyst for the “next decisive move.” That backdrop aligns with macroeconomic tailwinds. Shutdown uncertainty continues to amplify a “rates trade,” which could also delay some economic releases and keep markets leaning dovish.

To maintain momentum, the crypto market requires a string of positive spot ETF flow prints and clear evidence that BTC can absorb the supply overhang between $114,000 and $118,000 without reigniting long-term holder distribution.

Source: Cryptoslate

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Manuel

Central Bank

Commodity

Gold retreated as the dollar pushed higher and investors booked profits after a five-day rally that saw it reach fresh records. Traders also sought clues on the US economy as the government shutdown delayed key data.

In the absence of a weekly initial jobless claims report from the government, data from a private outplacement firm got more attention than usual. US employers dialed back hiring plans in September and announced fewer job cuts, according to outplacement firm Challenger, Gray & Christmas.

A gauge of the dollar rose, weighing on bullion as it’s priced in the US currency. Bullion’s successive peaks in recent weeks also make it more vulnerable to profit-taking. Gold has been in overbought territory for the past month, far outpacing the S&P 500 Index.

The metal has soared 47% this year, putting it on track for the biggest annual gain since 1979. The rally has been supported by central-bank buying and rising holdings in gold-backed exchange-traded funds, as the Fed resumed rate cuts.

Economists and policymakers will be relying more on private reports for clues about the labor market and broader economy in the absence of official data. Non-farm payroll numbers, which were due Friday, will be delayed because of the shutdown.

Traders have added to bets the Fed will cut rates twice more this year to support a weakening labor market. Lower borrowing costs tend to boost non-yielding gold, which also becomes cheaper for most buyers when the greenback softens.

Spot gold slipped to $ an ounce as of 5:18 p.m. in New York. The Bloomberg Dollar Spot Index rose . Silver and palladium both fell, while platinum was little changed.

Source: Bloomberg

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Manuel

Cryptocurrency

Avalanche (AVAX) is suddenly the target of a planned billion-dollar buying spree from public market digital asset treasury (DAT) vehicles.

AgriFORCE said it will rebrand to “AVAX One” and accumulate roughly $700 million of AVAX. Meanwhile, Avalanche Treasury Co. (AVAT) unveiled a $675 million SPAC deal that seeds about $460 million in balance sheet assets and sets a goal to surpass $1 billion of AVAX after listing.

Both offerings will be listed on Nasdaq, with AgriFORCE already having a listing that will be used by AVAX One, and AVAT joining Nasdaq post-merger in early 2026.

These initiatives can reshape AVAX’s role in the multi-chain finance, as it did with Ethereum (ETH) and Solana (SOL).

Price impact

The initial market reaction was mixed but notable. On Sept. 22, as AgriFORCE’s plan hit headlines, AVAX slipped to $29.41 in early trading during a broad risk-off move.

However, the token reversed to close at $33.49, up about 14% on the day. The movement extended to $36.16 in the first hours of Sept. 23, its first print above $36 since Jan. 31.

AVAX’s strength contrasted with a $30 billion drawdown in the altcoin market cap the same day, suggesting the announcement supported the performance.

Meanwhile, AgriFORCE’s stock (AGRI) spiked more than 200% intraday on Sept. 22, though it corrected 35% since and traded at $3.74 as of press time.

By contrast, the Oct. 1 AVAT announcement saw a milder 2.4% gain, which followed the altcoin complex adding roughly $140 billion in market cap. In this case, it is more challenging to attribute the movement to the treasury plans.

Maturity through DATs

The AVAX-buying push mirrors the broader 2025 rise of DAT companies that first gained traction buying altcoins, such as Ethereum and Solana.

In late May, sports betting tech firm SharpLink announced it would raise approximately $425 million and convert the proceeds into ETH under an advisory tie-up with Consensys co-founder Joseph Lubin.

BTCS followed with a 1,000 ETH purchase in early June, and BitMine rolled out an ETH treasury program by early July.

As the year progressed, BitMine and SharpLink accelerated their acquisitions, with their ETH balances climbing to 2.65 million ETH and 838,730 ETH, respectively, as of Oct. 2.

Ethereum’s price experienced a much-needed rebound and outperformed throughout the summer. ETH grew nearly 50% in July alone, then set a new all-time high of $4,956.78 on Aug. 24, almost four years after its previous price peak.

Additionally, US-traded spot Ethereum exchange-traded funds (ETFs) experienced a surge in inflows.

According to Farside Investors’ data, the funds encountered difficulty in breaching the $3 billion threshold in cumulative flows, but crossed the mark two days after SharpLink’s announcement.

Ethereum ETFs then compensated for the time it took to capture massive inflows, and skyrocketed to nearly $14 billion in cumulative flows by Sept. 19, a 342% growth.

Solana is another major-cap crypto that saw significant interest in the DAT wave. Policy shifts and capital raises by SOL Strategies, DeFi Development Corp., and Upexi culminated in SOL breaching the $200 price level in July, the first time since February.

As the mentioned companies built DAT momentum and fueled SOL to a price peak of $218 by August, Forward Industries ramped up the tone.

The company closed a $1.65 billion PIPE financing on Sept. 11, led by Galaxy Digital, Jump Crypto, and Multicoin Capital. The announcement was enough to catapult SOL above $250, its first time above this level since January.

Furthermore, as happened with Ethereum, the US-traded Solana ETF, which emulates spot exposure, also saw an increase in inflows.

The REX-Osprey Solana staking ETF (SSK) faced difficulties in attracting capital throughout August, despite a solid start. The fund captured $100 million in inflows just 12 trading days after its debut on June 2.

However, between late August and mid-September, SSK surpassed $200 million in cumulative flows for the first time on Sept. 11, amid SOL’s strong price action.

By Sept. 26, SSK added another $100 million to its cumulative inflows, with data from Farside Investors revealing the fund crossed the $300 million mark.

Together, these precedents form the playbook AVAX treasuries can now follow, pairing large public market capital infusions with direct token accumulation, then catalyzing secondary vehicles and ecosystem activity.

Going beyond “buy and hold”

AVAT is pitching a more integrated model than a simple “buy and hold.” The company stated that it secured an initial AVAX purchase at a discount to market and an 18-month priority window for Avalanche Foundation sales to US Treasury firms.

It also offered entry at approximately a 23% discount to direct token exposure (mNAV) and a mandate to deploy capital into Avalanche’s rails.

The mandate includes protocol investments that drive transactions, enterprise partnerships for real-world assets, stablecoins and payments, and validator support for institutional layer-1 launches.

CEO Bart Smith said: “We created Avalanche Treasury Co. to offer something we believe will be more valuable than passive exposure.”

Ava Labs founder Emin Gün Sirer welcomed the effort as “reflecting the growing sophistication and momentum shaping Avalanche’s future.”

On the AgriFORCE side, Anthony Scaramucci, who will lead the advisory board, cast the pivot in broader terms:

“The tokenization of assets is the single biggest theme for the next decade of finance.”

Hivemind’s Matt Zhang added the strategic ambition of building the “Berkshire Hathaway of the on-chain financial economy,” providing Wall Street with a scalable path into institutional-grade blockchain infrastructure.

What is in store for retail?

For retail investors, the structures open two potential channels, followed by two categories of risk.

The first is secondary shares of the treasury companies themselves, where AVAT, for example, advertises access at an implied discount to its underlying token basket.

That “secondary discount” can be attractive but is not guaranteed, and can swing with sentiment, liquidity, and the cadence of new issuance.

The second channel is indirect, as DATs concentrate capital in AVAX and may amplify price discovery, improve depth across spot and derivatives venues, and accelerate the build-out of on-chain applications that create real transaction demand.

Additionally, it can boost upcoming ETF flows, as filings for spot Avalanche ETFs from Bitwise, Grayscale, and VanEck are awaiting SEC approval.

Yet the same PIPE mechanics that fund treasuries can hurt existing shareholders when resale windows open.

A recent analysis of Bitcoin treasury names that utilized PIPEs reveals a recurring pattern of shares gravitating toward discounted issuance prices as unlocks approach. In several cases, the corrections erased most of the initial rally and, at times, trading below the PIPE level.

The dynamic creates an “overhang” that can pressure both the stocks and, indirectly, the underlying token when companies are forced to manage liquidity during periods of drawdown.

If the AVAX treasuries execute, the implications extend beyond the headline price.

A billion-dollar balance sheet buyer can legitimize AVAX alongside ETH and SOL in institutional policy frameworks, broaden the universe of allocators beyond crypto-native funds, and speed the emergence of AVAX-linked structured products.

Additionally, it sets the stage for deeper liquidity, more venues for regulated exposure, and a stronger case for the asset’s role in tokenized finance.